GAME hit by slow transition to PS4 and Xbox One

High street video game retailer GAME is suffering because UK consumers aren't switching to newer consoles fast enough.

The company has just issued a trading update, where it admits that it is struggling in a challenging UK market.

At the heart of the problem is the fact that UK consumers are finally dropping their PS3 and Xbox 360 consoles, resulting in much lower demand for older games. GAME admits that this has been a "faster than expected decline."

Compounding the issue, while sales of PS4 and Xbox One games are rising, they haven't proved to be enough to cover the shortfall.

The result of this is that GAME is predicting half-year earnings of just £30 million, which is a significant drop of £13 million from the same period last year.

"The trading conditions in the UK video games market have been challenging," says GAME CEO Martyn Gibbs (via Engadget).

"The switch over from the older gaming formats to PlayStation 4 and Xbox One software has impacted profitability across the UK market. The extent of the impact of this switch over has only become apparent in December which has been compounded by lower year on year high street and shopping centre footfall."

With console profit margins only likely to shrink as the PS4 and Xbox One continue to undergo aggressive price cuts, GAME will be hoping that the UK starts buying games again following the Christmas splurge.

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